Supply chain disruption: What firms can learn

Supply chain disruption: What firms can learn

Leadership & Management

Aarti Bisla

Aarti Bisla

226 week ago — 4 min read

The COVID-19 pandemic brings with it huge impacts with ripples that have spread far and wide. While the consumers see the impact in the form of empty shelves in the local supermarkets, the backstory tells a tale of a collapse of production facilities, shortage of raw material and lack of manpower due to lockdowns across various parts of the world. With the governments across the globe trying to contain it, the effect of COVID-19 are proving to be relentless and unprecedented in its scale and severity for human beings and supply chain.

Under these trying circumstances, businesses are grappling with hard choices and difficult questions:

  • Should they broaden their supplier choices, or do more local or near-shore sourcing?
  • How much inventory of raw materials, sub-assemblies and finished products should they stock to tide over the crisis?
  • Globalization Vs Localization?

Here are some actions that organizations need to prioritize:

Hone your risk mitigation strategies

Businesses should re-visit their procurement strategies for raw-material, and for finished good. Companies may need to invest to ensure that their supply chains are resilient. Companies must look at new ways to stabilize their supply chains. A few measures that they can take are:

  • Enlist new suppliers
  • Boost inventories
  • Invest in omni-channel distribution including on-line sales.

Be proactive and agile

In the current situations, companies may need more capital for production planning and product delivery. Some steps that can be taken are:

  • Re-purposing production lines (for instance, LVMH, the French maker of Dior and Givenchy perfumes and cosmetics, has decided to repurpose its production lines to make hand sanitizers to cope with shortages)
  • Rethink how your approach to globalization and strengthen local connects
  • Prepare for a long haul and keep an eagle eye on the still-changing scenario



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Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views, official policy or position of GlobalLinker.


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